What Does Federal Work-Study Offer? Quasi-Experimental Evidence From Administrative Data

• In Event: Aligning Dollars with Demand: Effects of Workforce-Aligned Financial Aid on Postsecondary and Labor Market Outcomes

Abstract

The Federal Work-Study (FWS) program, created in 1964 as part of the Economic Opportunity Act, is one of the oldest forms of federal assistance for college students. The program subsidizes up to 75 percent of the wages of eligible students working part-time, primarily in on-campus jobs, with colleges covering the remainder. In a typical year, FWS provides more than $1 billion in support to over 450,000 students with financial need at more than 3,000 institutions nationwide. Recent trends may lend the program renewed significance. First, there is growing recognition of behavioral and structural barriers to college persistence and completion, beyond purely financial concerns, that on-campus employment may help address. Second, in an increasingly competitive labor market, internships have become more important for post-college outcomes, yet access to such opportunities remains unequal by family income—making subsidized work experiences all the more critical.

Available evidence on the program’s effectiveness, as currently implemented, is mixed. On the one hand, some quasi-experimental evidence suggests that student employment may negatively impact students’ GPAs (Stinebrickner & Stinebrickner, 2003; Scott-Clayton, 2011b; Soliz & Long, 2016). On the other hand, non-experimental research generally finds positive effects of FWS participation on persistence (see review by Hossler et al., 2009). The only recent national study of FWS found that FWS participation appears to improve college persistence, graduation, and post-college employment, especially for students at public institutions and for those most likely to work elsewhere in the absence of the program (Scott-Clayton & Minaya, 2016). The present study examines the effect of FWS on new outcomes, including enrollment, and in a new setting, which includes community colleges (under-studied in the FWS literature).

We explore the impacts of receiving a FWS offer using administrative data from a large, multi-campus public college system. Our sample includes all undergraduate students who submitted a FAFSA to a community college or four-year college for the 2018 aid year and were eligible for FWS, regardless of whether they indicated interest in the program on the FAFSA. We use a difference-in-differences approach that compares FWS-eligible applicants to similar ineligible applicants who applied just before and just after an arbitrary cutoff date, after which FWS availability is limited. Our findings suggest that applying before the cutoff increases the probability of receiving a FWS offer by 17 percentage points and increases fall enrollment by 1 percentage point. This reduced-form estimate implies a treatment-on-the-treated effect of roughly 6 percentage points on enrollment for students who receive an offer. We do not observe significant impacts on full-time enrollment, fall-to-spring persistence, cumulative credits attempted or earned during the first year, or graduation within three and six years. The estimated effects are larger for students applying to a single institution—particularly community colleges—and for independent students.

Authors

• Veronica M. Minaya, Teachers College, Columbia University
  Presenting Author

• Adela Ruth Soliz, Vanderbilt University
  Non-Presenting Co-Author

• Judith Scott-Clayton, Teachers College, Columbia University
  Non-Presenting Co-Author

• Tianshu Ma, Teachers College, Columbia University
  Non-Presenting Co-Author